Holding Call On Castle & Cooke Stock

September 16, 1985|By Andrew Leckey.

Q--What should I do with my Castle & Cooke Inc. shares? Hold or sell?

A. Hold on, counsels William Leach, analyst with Donaldson, Lufkin & Jenrette Securities. He`s convinced this troubled food company should benefit from its recent merger with Flexi-Van. The corporate name Castle & Cooke was retained, but Flexi-Van management is in control.

``Even though Flexi-Van`s basic container-leasing business doesn`t seem to have much to do with Castle & Cooke operations such as Dole, Bumble Bee and A&W, it is likely to do a better job because it has more capital to work with,`` Leach said.

Q--We are senior citizens who have income from a variety of sources. We are planning to sell some stock at a loss. What will be the tax consequences? A--Your capital losses are first used to reduce any long- or short-term capital gains during the same tax year. Any excess losses can then be used to reduce other taxable income by up to $3,000, with any remaining loss carried forward indefinitely to future years.

``Only short-term losses can be claimed against other taxable income on a dollar-for-dollar basis,`` said Barbara J. Pope, tax partner at Price Waterhouse & Co. ``It takes $6,000 of long-term losses to produce the full $3,000 deduction.``

Q--My IBM stock hasn`t moved up as quickly as I`d like. Should I hold on? A--While this highly publicized computer giant certainly couldn`t be considered a hidden jewel, a number of brokerage firms remain high on IBM

(around $130 a share, New York Stock Exchange). For example, Prudential-Bache Securities believes new products at the higher end of IBM`s lines should give it strong earnings momentum through 1986, so it rates it a top choice for both short- and long-term investors.

Q--I hold stock in Public Service Electric & Gas, which has moved up about $10 in the last year and has increased its dividend substantially. Should I take my profits or hold for further income?

``Even though it is heavily involved in nuclear construction at its Hope Creek plant, the quality of its earnings is better than similar utilities,``

said Sharon Conway of A.G. Edwards. ``The reason is that it was allowed to include much of the construction work in its rate base.``

Q--Our small company received a month`s free rent as an incentive to move into a new building. Do we treat this as taxable income?.

A--That rental incentive is not considered taxable income.

The taxpayer typically pro-rates the fair market value of the incentive period over the term of the lease, thus reducing each month`s rent expense, says Judeth Tyminski of the accounting firm Deloitte Haskins & Sells.

Q--My wife and I own 200 shares of AMF Inc. When Minstar offered to purchase our shares at $23, we declined. But the price has recently been down to less than $14. What is our status with the stock? Should we have sold?

A--Since Minstar offered to buy only 55 percent of an individual investor`s holdings, you couldn`t have sold all 200 shares, anyway. Yet you`d definitely have been better off selling what you could. Minstar now holds controlling interest in AMF. .

Neil R. Feldman, director of risk arbitrage for Argus Research Corp., anticipates AMF stock will be canceled at a coming shareholder meeting and new AMF senior supported debentures will be issued for $18.25 face value. Those debentures will be callable for the next seven years at about 82 percent of their value.